I received the following email from a client in Moberly, Missouri.
Dale,
I wanted to drop you a line and let you know what has been happening here in little Moberly, Missouri. We just came off of our highest volume month (with the exception of one month) since February 2008. Starting in January of 2009, which was not our worst point, we had 52% of our inventory over 60 days old, 64 avg. days in inventory and less than 6 turns per year. Today we are down to 11% over 60 days aged and trimming quickly, 27 avg. days in inventory and 14+ turns per year. Due to many conversations with Jasen Rice we increased our AutoTrader package and more than doubled our AT traffic to nearly 2500 VDP’s last month with only about 50 units in stock, our previous high had been 1100. It’s not 10,000 VDP’s but it’s a good start.
A big thanks to you, Jasen and the entire staff at vAuto! We couldn’t have made it this far without you!
Sincerely,
Nick Miller
Below is a graph that shows a downward trend for Toyota’s in the market place during the month of January. The X axis is the timeline, and the Y axis is the ratio of vehicles entering the market to leaving the market on that day.
While there is a great deal of variability, for both Toyota and “Other”, which is everything but Toyota, but what I think is note worthy is that starting in January, the ratio of cars entering the market to leaving the market for Toyota is consistently lower than the control group.
Click image for full view
I’ve asked members of our data department to analyze the effect of Toyota’s recent troubles on the used vehicle market. I expect to have the results posted shortly.
The preliminary analysis, however, definitely shows that Toyota’s market day’s supply began decreasing in November and December, and that rate has really picked up in January. Unfortunately the decrease in day’s supply, however, does not represent faster retail movement, but rather vehicles being removed from the market for sale. I’ll have more detail on this matter soon.
I think it’s worthy to note that Toyota’s recent problems support the general premise that dealers should diversify their inventory. This strategy is analogist to diversification in an investment portfolio. No matter how solid a given brand or investment vehicle may be, it is unwise to have too much concentration in any single sector.
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